HomeMy WebLinkAbout07-24-13 HAZEN ELDER LAW � �= ��
Linda J. Olsen,Esquire c � �' -�" c-�
Attorney I.D.No. 92858 '-'- _ �- `� �
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2000 Linglestown Road rn -;= �_- �--- ��
Suite 202 � y- -� r,�, � r''
Harrisburg,PA 17110 �- �,- � .: -�- � ""
(717)540-4332 � ' ° ... -
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lolsen(a�hazenelderlaw.com . '___.
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IN RE: : 1N THE COURT OF COMMON PLEAS✓
ESTATE OF THRESSA E. SMITH, : CUMBERLAND COUNTY, PENNSYLVANIA
Deceased : ORPHANS' COURT DIVISION
: NO. 21-12-0858
RESPONSE TO
PETITION FOR CITATION TO SHOW CAUSE WHY AN
ACCOUNT SHOULD NOT BE FILED PURSUANT TO 20 Pa.C.S. � 3501.1 AND THE
APPOINTMENT OF A TEMPORARY FIDUCIARY UNDER 20 Pa. C.S. � 4301
SHOULD NOT BE APPOINTED
AND NOW COMES Respondent, James W. Smith, by and through his attorney, Linda J.
Olsen, Esquire, and the law firm of Hazen Elder Law and files this Response to Petitioner,
Eugene A. Smith, Jr.'s Petition for Citation in the above-referenced matter and in support thereof
avers as follows:
BACKGROUND FACTS
1. Admitted by way of information and belief.
2. Admitted.
3. Admitted.
4. Admitted.
5. Admitted in part. Denied in Part. It is admitted that advertisement of the grant of
letters testamentary was published on or about August 31, 2012 in the Cumberland Law Journal.
It is denied that was the first complete advertisement. By way of further response, the
advertisement of the Estate was required to be published once a week for three successive weeks.
The advertisements were published in the Central Penn Business Journal on August 24, 2012,
August 31, 2012 and September 7, 2012 and in the Cumberland Law Journal on August 31,
2012, September 7, 2012 and September 14, 2012. The final advertisement was not complete
until September 14, 2012. See Proofs of Publication attached hereto and made a part hereof as
Exhibit"A."
6. Admitted.
7. Admitted. It is admitted that Eugene A. Smith, Jr. is a residuary beneficiary under
the Last Will and Testament of Thressa E. Smith.
CITATION FOR ACCOUNTING UNDER 20 Pa.C.S. � 3501.1
8. Denied. It is denied that there have been repeated requests and telephone calls to
Respondent or his counsel by Petitioner or his counsel regarding the administration of the Estate
of Thressa E. Smith prior to the filing of this action. By way of further response, the only direct
communication that counsel for Respondent has had with Petitioner is the initial telephone
conference call on August 8, 2012 between Respondent's attorney, Linda J. Olsen, Esquire,
Respondent, James W. Smith, and Petitioner, Eugene A, Smith, Jr., during which Attorney Olsen
explained what was going to transpire with respect to estate administration, advised Petitioner
that he would receive all appropriate notices, and advised Petitioner that if he had questions, he
should contact either Respondent or Respondent's counsel. The requisite Orphans' Court
Notices of Administration were mailed to Petitioner on August 20, 2012. Respondent's attorney
has not received any additional telephone calls, emails, or correspondence directly from
Petitioner, and Respondent's attorney has never received any telephone messages or
correspondence from Petitioner's counsel.
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By way of further response, on or about November 19, 2012, Respondent received
correspondence dated November 11, 2012 from Petitioner, enclosing a copy of a Memorandum
dated October 24, 2012 from Frederick M. Nice, Esquire to Mr. Eugene A. Smith, Petitioner
herein, regarding Transfer of Oil, Gas and Mineral Rights Interest. A copy of that memorandum
was faxed by Respondent to his counsel, but Respondent's counsel has not received any
correspondence or telephone messages directly from Petitioner or Petitioner's counsel regarding
the administration of the Estate. No response was required by Respondent's counsel as these
materials were not directed to counsel for Respondent. See Exhibit"B" attached hereto and
made a part hereof.
9. Admitted in part. Denied in part. It is admitted that Petitioner has not received
any distributions from the Decedent's Estate since the Respondent's appointment as Executor. It
is denied that any such distribution would have been timely. By way of further response, it is
improper for case law to be cited in a Petition for Citation; a Petition is to include only numbered
paragraphs each setting forth one averment. Notwithstanding that it was improper for Petitioner
to cite case law in his Petition, Estate of McCrea, 380 A.2d 773 (Pa. 1977) is not on point in the
instant case. In McCrea, the delay was more than twelve years; whereas, in the instant case, the
one-year statutory period of time in which claims can be filed against the Estate will not expire
until September 14, 2013, and no distribution to any residuary beneficiary is appropriate until
then. By way of further information, in accordance with decedent's comprehensive estate and
asset protection plan, Petitioner was the named beneficiary of one-half of an immediate annuity
that was set up by Respondent and which provided Petitioner with greater benefit than Decedent
provided for him in her estate planning documents. Claim forms for the annuity were sent to
Petitioner by Respondent's counsel on September 7, 2012 and to the best of Respondent's
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counsel's knowledge, information and belief, Petitioner has already received these benefits
totally approximately$20,000.
10. Admitted.
11. Denied. It is denied that Decedent suffered from diminished mental capacity as
early as 2005. It is further denied that Decedent was "placed in a nursing facility" in 2005. In
fact, in 2005 Decedent was still residing in her own home and was not in a nursing home. Proof
of Petitioner's averment is demanded.
12. Admitted.
13. Admitted in part. Denied in part. It is admitted that the Butler County,
Pennsylvania Parcel and rights under the SWEPI LP Memorandum of Lease were transferred to
Respondent by the authority granted to Respondent in Decedent's Power of Attorney. It is
denied that the transfer was initiated by Respondent in his capacity as agent under decedent's
Power of Attorney. Rather, the property was gifted by decedent to Respondent as part of a
comprehensive estate and asset protection plan.
14. Admitted in part. Denied in part. It is admitted that the Butler County Parcel was
not listed on the Pennsylvania lnheritance Tax Return or the inventory. It is denied that the
omission was intentional. By way of further response, the gifted property was a non-probate
asset and thus was not required to be listed on the inventory. Although the fair market value of
the Butler County Parcel was included in the assets of the Estate for purposes of calculating the
early payment of inheritance tax, it was inadvertently omitted from the final return. A
supplemental inheritance tax return was filed on July 3, 2013 and included the Parcel on
Schedule G. A copy of the Supplemental Return is attached hereto as Exhibit"C."
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15. Admitted in part. Denied in part. It is admitted that the initial Pennsylvania
Inheritance Tax Return inadvertently failed to include the Butler County property and the oil and
mineral lease having zero value.
a. Denied. The assets reported on Schedule F were intended to be gifted as part
of Decedent's comprehensive, well-constructed estate and asset protection
plan.
b. Admitted in part. Denied in part. It is admitted that the cash that was gifted
by Decedent to James W. Smith was received pursuant to the Lease with
SWEPI LP. It is denied that the description included on the Pennsylvania
Inheritance Tax Return was incomplete. It is further denied that Respondent
improperly transferred the $43,500.00 to himself under the POA.
c. Admitted in part. Denied in part. It is admitted that Respondent inadvertently
failed to list the Butler County property on Schedule G as required under 72
Pa.C.S. § 9107 (c)(3). It is denied that the Parcel should have been appraised.
By way of further information, a Supplemental Pennsylvania lnheritance Tax
Return was filed with the Register of Wills of Cumberland County on July 3,
2013, and the Butler County property was listed on Schedule G of the
Supplemental Return using the assessed value times the Butler Common
Level Ratio in order to determine fair market value. This is an approved
method for determining fair market value for a property that was gifted during
decedent's lifetime.
d. Admitted in part. Denied in part. It is admitted that the prepaid funeral costs
of$10,814.97 were reported on Schedule G because the funds were
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transferred within one year of decedent's death. It is denied that it would have
been more appropriate to list that asset on Schedule E. By way of further
information, on June 4, 2013, the Pennsylvania Department of Revenue
accepted the original inheritance tax return as filed and did not challenge the
reporting of this asset on Schedule G rather than on Schedule E. See Exhibit
"D" attached hereto.
e. Admitted in part. Denied in part. It is admitted that the initial Pennsylvania
inheritance tax return inadvertently failed to include the SWEPI Lease as an
asset of the estate because, in accordance with Pennsylvania Department of
Revenue Inheritance Tax Bulletin 2012-01, the lease was non-producing and
has a zero value. All payments received by the decedent prior to her death
were reported on her personal income tax return, and the lease was gifted to
her son, Respondent herein. By way of further information, the SWEPI lease
is a five year lease, and no rents or royalties are expected or due to the estate
of decedent. The lease, reflecting a zero value, is included on Schedule G of
the supplemental Pennsylvania inheritance tax return filed on July 3, 2013, a
copy of which is attached hereto.
16. Denied. It is denied that the discrepancies on the Pennsylvania inheritance tax
return were intentional or that an accounting of Respondent is necessary for the proper review of
the assets of the Estate and its administration. By way of further response, following the
expiration of one year from the date of final advertising of the Estate, Petitioner has always
intended to provide Petitioner with a Family Settlement Agreement outlining the steps taken in
the administration of the Estate and providing all beneficiaries with an accounting of the assets
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and a Schedule of Proposed Distribution in accordance with the terms of decedent's Last Will
and Testament. A request for an accounting prior to the expiration of one year from the date of
death and the ability of any creditor to timely file a claim is unnecessary, inappropriate and
premature.
APPPOINTMENT OF A TEMPORARY FIDUCIARY UNDER 20 Pa. C.S. �4301
17. Denied. It is denied that Respondent, in his capacity as Executor of decedent's
estate,has failed to pursue and collect all assets of Decedent's Estate or that he has breached his
fiduciary duty of care to the Estate and the beneficiaries. No citation to case law is an
appropriate part of Petitioner's Petition and should be disregarded by this Honorable Court at this
juncture of the proceeding.
18. Denied. It is denied that Respondent has failed to fulfill his responsibilities as the
personal representative of the Decedent's Estate, is in a conflict of interest, or that the
beneficiaries of the Decedent's Estate have suffered, and will continue to suffer, significant
economic loss as a result of Petitioner's negligence. In fact,by prematurely filing the Petition
for Citation, an abuse of process, Petitioner is causing the Estate to unnecessarily expend funds
for additional attorneys' fees and costs to the detriment of the Estate and its beneficiaries,
including Petitioner.
19. The averment of Paragraph 19 is a conclusion of law to which no responsive
pleading is required. It is denied, however, that an accounting of the Respondent's actions as
agent of decedent's Power of Attorney is warranted or that any assets gifted by decedent prior to
her death should be returned to Decedent's Estate and distributed according to the terms and
provisions of Decedent's Will.
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20. The averment of Paragraph 20 is a conclusion of law to which no responsive
pleading is required. It is denied, however, that Respondent should be removed as the Executor
of Decedent's Estate because there is no conflict of interest as a result of Respondent acting as
agent under decedent's Power of Attorney. No citation to case law is an appropriate part of
Petitioner's Petition and should be disregarded by this Honorable Court at this juncture of the
proceeding.
21. The averment of Paragraph 21 is a conclusion of law to which no responsive
pleading is required. Although the premise set forth in Paragraph 21 of Petitioner's Petition
may, in fact, reflect the state of the law and the cases cited, Respondent respectfully represents
that citations to case law are not an appropriate part of a Petition for Citation, and any such
citations should be disregarded by this Honorable Court at this juncture of the proceedings.
22. The averment of Paragraph 22. is a conclusion of law to which no responsive
pleading is required. By way of further information, however, it is denied that this Honorable
Court should appoint a substitute fiduciary in this case.
23. The averment of Paragraph 23 is a conclusion of law to which no responsive
pleading is required.
24. The averment of Paragraph 24 is a conclusion of law to which no responsive
pleading is required. By way of further response, however, it is denied that a successor Executor
or temporary fiduciary should be appointed in order to pursue an accounting of Respondent as
agent under the POA ar to seek the return of assets to the Decedent's Estate.
25. The averment of Paragraph 25 should more properly be a part of Petitioner's
prayer for relief and, as such, is an averment to which no responsive pleading is required.
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WHEREFORE, Respondent respectfully requests that this Honorable Court issue an
order that:
a. Petitioner's Petition is premature and is DENIED;
b. Respondent, James W. Smith, shall not be required to file a formal accounting
of his actions as Executor of the Estate of Thressa E. Smith with this
Honorable Court; and
c. Respondent, James W. Smith, is permitted to continue as Executor of the
Estate of Thressa E. Smith and to complete the administration of the Estate in
accordance with the provisions of applicable Statutes, Rules, and standard
legal practice including, but not limited to, the preparation and filing of a
Family Settlement Agreement. The said Family Settlement Agreement shall
include an accounting of the assets and expenses of the Estate and shall be
prepared in a timely fashion following the expiration of the one-year period of
time during which creditors are permitted to file claims against the Estate.
Respectfully submitted,
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Linda J. sen, Esquir
Attorney I.D. No. 92858
HAZEN ELDER LAW
2000 Linglestown Road, Suite 202
Harrisburg, PA 17110
(717) 540-4332
lolsen e,hazenelderlaw.com
Attorneys for Respondent, James W. Smith
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VERIFICATION
I, James W. Smith, verify that I am the Respondent in the foregoing document and that
the facts set forth therein are true and correct to the best of my knowledge, information and
belief, and that this Verification is made subject to the penalties of 18 Pa. C.S.A. § 4904 relative
to unsworn falsification to authorities.
Date: July 23, 2013 �
J es W. Smith
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THE CENTRAL PENN B USINES S JOURNAL
Proof of Publication
Under the Pennsylvania Newspaper Advertising Act
45 Pa.C.S. §101, etseq.
Commonwealth of Pennsylvania }
ss}
County of Dauphin }
Jerome Zary,being duly sworn according to law,deposes and says:
That he is the controller of and duly authorized agent for JOURNAL MULTIMEDIA CORPORATION, a corporation
organized and existing under the laws of the Commonwealth of Pennsylvania, with its principal office and place of business at 1500
Paxton Street,in the city of Harrisburg,County of Dauphin, State of Pennsylvania;that the THE CENT'RAL PENN BUSINESS
JOURNAL,a newspaper of general circulation distributed and circulated in Dauphin,Cumberland,Lancaster,Lebanon and York
counties,is published by the said JOURNAL MULTIMEDIA CORPORATION at 1500 Paxton Street,in the City,County and State
aforesaid;and that THE CENTRAL PENN BUSINESS JOURNAL was established September 9th, 1984 and has been continually
published ever since;
That the printed notice or publication which is securely attached hereto is exactly as printed and published in the weekly
editions/issues of the CEN'TRAL PENN BUSINESS JOURNAL which appeared on the 24�'and 3151 day(s)of August and the 7�'
day(s)of September 2012. That neither he nor said Corporation is interested in the subject matter of said printed notice or advertising,
and that all of the allegations of this statement as to the time,place and character of publication aze true;and
This is a statement published by JOURNAL MULTIMEDIA CORPORATION:
PUBLICATION ' LETTERS TESTAMENTARY on the Estate !
COPY � Thressa E. Smith, (died July 10, 2012), Jerome Z y
late of Newville, Cumberland County,
Pennsylvania,were granted on August 7,
2012 to James W.Smith
All persons indebted to the decedent are Sworn to and subscribed before me thi�/ day of ` 2012 A.D.
required to make immediate payment
and those having claims or demands to
present them without delay to: '
Estate of Thressa E.Smith NOTARY PUB C
c/o Hazen Elder Law
2000 Linglestown Road,Suite 202 COMMOMN'"rALTH OF PENNSYLVANIA
Harrisburg,PA 17110 NOTARIAL SEAL
DONNA SCHANKUVEILER,Notary Public
OR Gty of Harrisburg,Deupt�in Co�xKy
My Cor'�rr,ission ExpN'es October 03,2016
James W.Smith,Executor
c/o Hazen Elder Law
2000 Lingiestown Road,Suite 202 �
Ha[risbufa PA 1711 n.
Publisher's Receipt for Advertising Cost
JOURNAL MULTIMEDIA CORPORAT'ION,publisher of the CENTRAL PENN BUSINESS JOURNAL,newspaper of general circulation,
distributed and circulatecl in Dauphin,Curnberland,Lancaster,Lebanun and York counties,hereby acknowledges receipt of the aforesaid
notice and publication costs and certifies that the same have been duly paid.
THE CENTRAL PENN BUSINESS JOURNAL
Re:Estate of Thressa E.Smith By................................................................
Hazen Elder L.aw
2000 Linglestown Road,Suite 202
Hazrisburg,PA 17110
Attention:Corinne Eggers Woodhouse
PROOF OF PUBLICATION OF NOTICE
IN CUMBERLAND LAW JOURNAL
(Under Act No. 587, approved May 16, 1929), P. L.1784
COMMONWEALTH OF PENNSYLVANIA :
. ss.
COUNTY OF CUMBERLAND .
Lisa Marie Coyne, Esquire, Editor of the Cumberland Law Journal, of the County and
State aforesaid, being duly sworn, according to law, deposes and says that the Cumberland Law
Journal, a legal periodical published in the Borough of Carlisle in the County and State aforesaid,
was established January 2, 1952, and designated by the local courts as the official legal
periodical for the publication of all legal notices, and has, since January 2, 1952, been regularly
issued weekly in the said County, and that the printed notice or publication attached hereto is
exactly the same as was printed in the regular editions and issues of the said Cumberland Law
Journal on the following dates,
viz:
August 31, September 7, and September 14, 2012
Affiant further deposes that he is authorized to verify this statement by the Cumberland
Law Journal, a legal periodical of general circulation, and that he is not interested in the subject
matter of the aforesaid notice or advertisement, and that all allegations in the foregoing
statements as to time,place and character of publication are true.
isa Marie Coyne, Editor
SWORN TO AND SUBSCRIBED before me this
14 da. o�ptember, 2012
�
- otary
Smith,Thressa E.,dec'd.
Late of Nevwiile.
Executor: James W. Smith c/o
Hazen Elder Law, 2000 Lin-
glestown Road, Suite 202, Haz-
risburg,PA 17110. NOTARiAL SEAL
Attorneys:Hazen Elder Law,2000 DEBORAH A COLLINS
Ling�estown Road,Suite 202,Haz- Notary Public
risburg, PA 17110. CARLISLE BOROU6H,CUMBERLAND COUNTY
My Commission Expires Apr 28,2014
EX�llblt "B"
2012-11-19 13:�4 DPW Tel��om Unit 717-?72�4128 >� n Elder Law P 2/4�
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rm,
1 understand Chat deci�i�r�s need�d tc�be m�de quickiy En er ta con'Cinu�to provi�ie far
mam's care. t3eci�ir�ns had t� be mad�and l'm sure not af 'f rherr� were easy, I trust that y�u
and her adviso�s di�! everything n�cessary ta rriake sttre sh� was taken eare af. i appre�i�t�al!
yau did for her. As a fo((ow-up tt�our telephorie cc�nversation reg�rc4ing the f�rm, f have
inquired into the proeess of transferring the p�a�tion of the�urface and r�rinerai rights that y�u
ha�e offered ta me. !t is� ge�neraus c�ffe�and i'm sure ma � would E�e ple�ased to know the
farm has cantinu�d to prc�vide far her family. �
The�ttached memo outtines the recommer��t��ns of Fred Nice, an atto�`riey experi��ttetl wit!�
�inera(rights ar�d (eases. �red expiains haw he reccammen`d�we mav�thraugh the pracess.
Yau mentianed ta Mark that you were concerned that I mi��lit want to sell, which is n�t the case
as it makes na sense tc�. Regardless, Fr�d explains th�t a re�� �ri�tive cavenanC tt��e+rs can b�
intluded in the agreement that wauid alleviate this concer .
After ou've h�d a chanc�ta review the memv,please cal(� e a't (352)75�.-7573 ta disfiu�s
Y
having Fred prepare an agreement and move forward as d scribed at my expense.
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2t112-11-19 13:24 DPW Tel�com Unit 7�7-772, 4128 �> n Elder Law P 3!�
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M�M�RAN�1J�11
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T[r: MR. Eu�EwE A, anniY�
F�zoM; FK�ED�Rt�K M. N1c�, EsQUSR�
SUBJECT: TRAt�SFER QF CrIL, �AS RNt�NIlN�RA !RIGHTS lNTEREST
DATE: U�Tt�BER 24, 2�'t2
�I;
;
Mirrerai Riphts Assianm�nt
— — « � � �
Your`brother, ,�arn��W. Smith { .Jim ), as �gre�d tt� transfer a 5�/4 int�rest ir�
h
the�il, gas �nd mineral rights in regard to a c�rtain pr�' erty I�c�t�d ir� t3akiand
Township, Butier County, Per�nsy(vania that was previ��usly c�wned by yc�ur mother,
Tt�ressa E_ Sm�#h.
In this regard, 1 have reviewed#h� Last Wi11 an �'�stament of Thr�ssa E. Srnitt�
dated May 31, 200�, #he Dur�ble P�wer of Attorney foEr Thressa E. Smith d�ted M�y ��,
204�, the Paid Up Oil �nd �as Lease dated Sept�mbe � 19. 201'� ("Gas Lease"} and a
c�rtain deed d�ted April '!7, 2Q12 by James W. Smi#h� 'ttomey-in-fact for�'hre�sa E.
�mith, ta Jam�s W. Smith, individuaily.
By way t�f b�cl�gr4und, the certain re�{ estat� ne� by Tt�ress�a E. 5mith was
tran�ferr�d by D�ed dated April 17, 2012 to Jim. Thi ransfer w�s just priar fio
Thressa's deat�r in Ju1y, 2012. Prit�r tv the real estate ransfer, � �as L�;ase was
enteced inta on Sept�mber 19, 2011 b�tween Thress� E. Smith and SWEPI, LP. The
G�s leas� r�main� in force far a primary term af five�!�} year�and �ncludes languag�
that it is binding upc�n heirs, �xecutors, staccessors an��assigns.
�i�
Discussian ��
As we have briefly discussed, the aii, gas an� �� 'in�rai rights fc�lfow fhe owr�ershfip
of the property. The first part of the tr�nsa�#ion woutd�be the prep�ratiar� �f a deed
providir�g br�th .lim and Gene witt� an undivided 50°!a � terest, as t�n�nts in �ammon, in
the rea! estate. Tenants in common means that ea�h�individua( wou(d own their 5t�°Jo
interest in the re�i �state ar�d cpuid tran�fer s�me ta� �eir heirs ar assigns.
i underst�nd that there is s�me cancern on Jt` �4's part tt�at Gene may vrr�r�t to sell
his interest�n the praperty c�r mineral ri�hts. ln arder � � alleviate this c�ncem, we can
simply prt�vide a r�strictive cover�ant ta heirs includin i �children and grandGhildr�n as
part Qf the cQnveyance_ Pl�ase note that it is unlikel �tl�at a saie af� 5{3°lo int�rest cauld
be accomp}ish�d without the cons�nt of the other p� .
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2012-19-19 13:25 DPW Telecom Unit 717-?7�, 4128 �� n Elder Law P 4/4
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!r� additiQn tc� a tr�nsfer�f a �ne-ha{f int�rest in t � praperty frc�m Jim to G�n�,
the secor�d part af the tr�nsa�tion wilt rec�uire an assigr�,`{,enf of a 50°lo awnership
interest in the curr�nt Gas Le�se to Jim and Gene, as t�nants in commc�n. in order ta
accomplish ti�e assignment under the Gas Lease we wil�;rteed to wark with the current -
leasehvlder who may include one or more gas campa�i��,'s. Jimr shauld have additional
information in this regard.
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Cc�nclusion ��
In order#� move forward, it i� my r�c�mmendati�n�h�t we prepare a short
agreement#o be s+gned by,3im and Gene �n regard to t'�I� canveyance c�f the 5p°lo
interest as autline�. (f ali parti�s are in agi�eerrt�nt, we�iEl imm��iately pr�par� a deed
to the property fa accamplisM #h�gif�. In addition, w�v►iiauid begin n�gvtiatie�ns with the
ail and gas eomp�ny t� recogr�ize the transfer�nd assi 1 nm�nt of�a 50°lo inter�st in the
current�as Lease ta Jim and Gen�, coileetively-
As we have bri�fiy discus�ed, d�aling with an vi# . nd gas c�rr�pany c�r� b�� slow
proeess. My office wauld be responsible f�r�reparati t�f� ���d tc� memon�lize th�
��nveyanc� as well as tc� deal with tt�� c�il and gas com��ar�res that rnay be involved in
the Gas Lease. Ple�se rev'sew th�se matters with yaur�� 'ro#her, Jirn, and let rne knQw
how yQU would like to praeeed. As indicat�d, we recomr�rend tt�e pr��aration t�f a
sirr�p(�e agreement to rnernorializ� everyone's understa�� �ing befor� mc�ving farward.
Uporr ccxmpletion af th� shc�rt agreem�nt, we woulci im� ediately begin the prep��tic�rt
af a d�ed as we11 as begin working with the oil ccrmp��n �ies} ir�the underiying
assignrn�nt. ( 1c►ok fc�rward tt� hearing�ram y�u_
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EX�llblt "C"
� ��a5�za��3
����� �/�� EX{02-11) �
u OFFICIAI.USE ONLY
PA Department of Revenue pennsylvania County Code Year File N�mber
Bureau of Individual Taxes �P�TMENTOFXBVENUE
Fo aox.2sosa� INHERETANCE TAX RETURN 21 12 0858
Harrisburg,PA 1712$-0601 RESIDENT DECEDENT
ENTER DECEDENT ItJFQRMATiQN BELOW
Social Security Number Date of Death Date of 8irth
375 05 3995 Q7 1Q 2012 06 29 1915
Decedent's Last Name Suffix DecedenYs First Name MI
sr�=Tx �x�ss� E
(!f Applicable}Enter Surviving Spause's tnfarmation Belaw
Spouse's last Name Swffix Spouse's First Name MI
5pouse's Social Security Number THlS RETt1RIV MUST BE FILEQ IN DllPLIGATE WlTH THE
REGISTER C3F WtLLS
FI�L Ihf A�'PRC7#�#21A7E QYA�S BELOW
� t. Origina!Retur� � 2. Supplementai Retum � 3. Remainder Return(�ate of Death
priar to 12-13-82)
� 4. l.imffed Estate � 4a.�utwe tnterest comprc�n+se � 5. Fec}erat Estate Tax Ra#um Required
{date ot death after 12-12-82}
Q g, pecedent Qied Testate 7 peceder�t Maint ined a Living Trus! � 8. ToTal Number of Safe Deposit Soxes
{Attach Copy o#Wiii) ❑ (Attach Gopy of�rust)
� 9. LiGgation Proceeds Received � ����en�i�13���andit�(oates�f Death GI ��,Election to tax under Seg._9113(A)
s {Attach Sctt�ule 0�-,
�
_. ,�.
� , . . .
_ �.
CQRRESPONDEN7-THIS SECTtON MUST BE CpMPLETED.ALL CORRESPONDENCE AND CONFIDENTIA A�S.MNFORM/k�JON SHOUL�BE DIRECTED TO:
Name ��y�ime Telep��e N�umbe�
LINDA J OLSEN "�' �"-� 540 4332 '.
�_ —. � ,
�.: =.:: `�_'"
G�7ER OFWILL$USE;ONLY
�.� , , .
�., ':
_� -.
�--, __:
; .
First Line ot Address �' �. '''
2 Q 0{3 L INGLE S TC}WN RQAD ` .-�-.r �. �: � > .
�.r �
Second Line of Address
5UITE 202
DA7E FILEQ
C3ty or Post Office State Z!P Code
HARRISBURG PA 17110
Carrespondent's e-mail address: �a'�SeCI p�h�Z�It�ICI@PI�W.COm
Under penaiGes of perjur}r,I deciare that I have examined this return,inCiuding accompanying schedufes and statements,and to#he best af my knowledge and hetief,
it is true,correct and compiete.Deciaration of preparer ather than the personal representative is based on alt information of which preparer has any knowledge.
IGNATURE 4F PERSON RESPqNSIBLE R FIL NG RETUFtM DATE
t..�✓ James W Smith `"c7 '1..�
ORESS
315 Rabson Road, Dillsburq, PA 17019
S1GNA QF PREPARE OTHER AN REPRESENTATIVE �. " DATE
Linda J.O(sen, Esq. _ j
ADD ESS
2Q00 Lingiestown Rd. , Harrisburg, PA 17110
Side 1
L„�„� ],5[I56]�[]�43 �,50563��],43 �
� zsa56�a�4�
REV-1500 EX
Decedent's Sociai Security Namber
Decedent�sNeme: $milth, Thressa E 376 05 3995
RECAPITUL.ATI4N
1. Real Estate(Schedule A}............................................................._........................ 1.
2. Stocks and Bonds(Schedule B)............................................................................. 2.
3. Closely Heid Carporation,Partnership ar Sole-Proprietarship(Schedule C)......... 3.
4. Mortgages&Nates Receivable(Schedule d)...................................................:.... 4.
5. Cash,Bank Depasits&MisceHaneous Personal Property{Schedule E}............... 5.
6. Jointly Owned Property(Schedule Fj ❑ Separate Billing F2equested.......,.... 6.
7. tn#er-Vivos Transfers&Miscellaneous t�q Probate Praperty
(Schedule G) U Separate Billing Requested............ 7. 19, 5$0 . 4 0
8. TotaE Grass Assets ltotal Lines 1 #hrough 7}........................................................ $. 1�� �J��I . �l�
9. Funeral Expenses and Rdministrative Costs{Schedule H}.................. 1� . 0 a
.................. 9.
10. aebts of Decedeni,Mortgage Liabilities and Liens{Schedufe i}............................ 10.
11. 7otal Deductions(totel Lines 9 and 10)................................................................ 11. 1.5 . O(�
12. Net Vaiue of Estate(Line 8 minus Line 11).......................................................... 12. I.�� 5�5 . $�)
13. Charitabfe and Gavernmentai BequestslSec 9113 Trusts far which
an aiection to tax has not been made(Scheduie J}............................................... 13.
14. Net Value Subject ta i'ax{Line 12 minus l]ne 13}............................................... 14. 1.�,5�i5. 4 C1
TAX COMPUTATlON-SEE tNSTRUCTlONS FOR APPLICABLE RATES
15. Amaunt of�ine 14 faxable
at the spousal tax rate,or
transfers under Sec.9116 3� d _ ��
{a)(1.2}X.00
16. Amount of Line 14 taxable
atlinealrateX A45 19,565 . 40 �6. 8$Q . 44
17. Amount of Line 14 taxable
at sibling rate X.12 0 . 0 0 17. � - ��
18. Amount of Line 14 taxabie
at collateral rate X.15 0 . 0 0 18. 0 . 0 0
19. TAX DUE.......................................... . .. 19. 88t� . 44
.. ............................................................... ..
20. Fll.l!N THE bVAL IF YOU ARE REC2UESTING A REFUND OF AN OVERPAYMENT. �
Side 2
� �5�S67,Q243 �505b1t]243 �„�
REV-1500 EX Page 3 File Number 21-12-0$58
Decedent's Complete Address:
DECEDENT'S NAME
Smith,Thressa E
STREET ADORESS
Green Ridge Village
210 Big Spring Rd
CITY STATE ZIP
Newvilie PA 17241
Tax Payments and Credits:
1. 7ax Due(Page 2,Line 19) (1} $84.44
2. CreditslPayments
A. Prior Payments
8. Discount
Totai Credits(A +B} {�)
3. Interest {3} 6.21
4. If Line 2 is greater than Line 1 +Line 3,enter the difference. This is the OVERPAYMENT. (4}
Check box on Page 2,�ine 20 ta request a refurtd
�. If Line 1 +Line 3 is greater than L'tne 2,enter the difference. 7his is the TAX DUE. (5) $$6,65
Make Check Payable ta REGISTER OF WILLS, AGENT
ti w
� , .. ,q �
. � ,.� � ��h A � � r� ,� . „
; . _ ." . ' .. -- '�s�'�s . �.,�'za..., h��,�..���.. , `�" , a�... '�,.,, n 'r.� ,�,�a..� .,.�,-...e�7 ,_ �"�,. ... .... , `� .; �
_ . ....�. � .. ,���-� . . .. ,. ' ` , :., .. ..�.�''„�s`
PLEASE ANSWER THE FOLLOWING QUESTIONS BY PLACING AN "X" !N THE APPRQPRlATE BLOCKS
1. Did decedent make a transfer and: Yes No
a. retain the use or incpme of the property transferred:............................................................................... �
b. retain the right to designate who shall use the property transferred or its incame:.................................. 0
c, retain a reversionary interest;or............................................................................................................... n
d. receive the promise far life af either payments,benefits ar care?............................................................ ❑ �
2. If death occurred after Dec. 12, 1982, did decedent transfer property within one year of death without ��t
receiving adequate consideratian?............................................................................................._..................... ❑ i X1
3. Did decedent own an"in trust for" or payable upon death bank account or security at his or her death?....... ❑ �
4. Did decedent awn an individuai retirement accaunt,annuity,or other non-probate property which
cantains a beneficiary designation?.................................................................................................................. 0 ❑
IF TH6 ANSWER TO ANY OF THE ABOVE QUESTIONS IS YES,YOU MUST COMPIETE SCHEDULE G AND FILE IT AS PART OF THE RETURN.
� . � .
,, a
� � �
,.
, ��� �
- ��� , �� .� � ,� '� �. �a ��, � ,,.� ., �E . �� �, �� �, � o �, .y �,,
For dates of death on or after July 1, 1994 and before Jan. 1, 1995,the tax rate imposed on the net value of transfers to or for the use of the surviving
spause is 3 percent[72 P.S.§9116{a)(1.1}{i}].
For dates of death on or after January 1, 1995,the tax rate imposed an the net value af transfers to ar for the use of the surviving spouse is 0 percent
[72 P.S.§9116{a){1.1)(ii)j. The statute does not exempt a transfer to a surviving spouse fram tax,and the statutor}r reguirements for disGosure of
assets and fiti�g a tax ceturn are stiR applicable even i#the surviving spouse is the only beneficiary.
For dates of death on or after July 1,2000:
. The tax rate imposed on the net value af transfers from a deceased child 21 years of age or yaunger at dea#h to or far the use of a naturai parent,an
adopkive parent,or a stepparent of the child is 0 percent[72 P.S.§9116(a)(1.2)�.
. The tax rate imposed on the net value of transfers ta or for the use of the decedenYs lineaf beneficiaries is 4.5 percent,except as noted in
(72 P.S.§9116(a}{1}j.
. The tax rate imposed on the net valua of transfers to or for the use of the decedenYs siblings is 12 percent[72 P.S.§9116(a)(1.3a}. A
sibling is defned under Sectian 9142,as an individual who has at►east one parent in common with the decedent,whether by btoad or adoptian.
Rev-1510 EX+�08-09)
SCHEDULE G
pennsylvania lNTER-VIVOS TRANSFERS AND
DEPARTMENT OF REVENUE
INHERITANCETAXRETURN MISC. NON-PROBATE PROPERTY
RESIDENT DECEDENT
ESTATE OF FILE NUMBER
Smith, Thressa E 21-12-0858
This schedule must be completed and filed if the answer to any of questions 1 through 4 on page three of ihe REV-1500 is yes.
ITEM DESCRIPTION OF PROPERTY DATE OF DEATH %OF DECD'S EXCLUSION TAXABLE
NUMBER THE DATE OF TRANSFER SATTACN A CO Y OF THE DEED OR REAL ESTATE. VALUE OF ASSET INTEREST (�F APPLICABLE) VALUE
1 Oil and Gas lease on real property located at East of 0.00 0.00
Bonnie Brook Rd.,Oakland Twsp., Butler Co., PA-
lease was signed Sept. 19, 2011 for five years. This is
a non-producing property, no royalties have been
received. See attached Inheritance Tax Bulletin 2012
-01 isued July 10,2012 and revised July 13, 2012
regarding the valuation of Natural Gas Interests. This
is a leased, non-producing property with no fixed
future payments;therefore,the interests are being
reported as having zero value. This interest is being
reported on Schedule G,rather than Schedule E
because the lease was transferred to Decedent's son,
James W. Smith,within one year of date of death.
2 Real Property-East of Bonnie Brook Rd., Oakland 19,580.40 100.000% 19,580.40
Twsp., Butler Co., PA-Assessed value of land is
$3,330; FMV is assessed value multiplied by Butler
Co.Common Level ratio of 5.88; transferred to
decedent's son,James W. Smith on April 17, 2012.
TOTAL(Also enter on Line 7, Recapitulation) 19,580.40
(If more space is needed,additional pages of the same size)
Copyright(c)2009 form software only The Lackner Group, Inc. Form PA-1500 Schedule G(Rev.08-09)
2012-04-07 11 :05 DPW Telecom Unit 717-772�4128 » n Elder Law P 2/3
BUTLER AREA SC�OOL D�STRICT .. e .- .• .
�TULY �� 2 O Z 2 THRU JUNE 3 O, 2 013 1C�1D OF TAX MILLS/RATE AMOUNT
SCHOOL 22EAL ES'�A'z'H TAXES SCHOO� 91,.8000 305.69
� ACT 5. 1 PC 5.00 .00
BiIlDate: 08/O1/2012 ' ACT 6�9 PC 5_00 .00
Property I�oc: E OF SONNIEBROOK R,p .
D/M/P: 250-7.F7.�k7- 30A.A-0000
N(ake Chack Payable To:
SHERRY L. FILG�S, 'z'.AX COLLECTOR
Payment Requested At: ,a�A-sap z�ia DiSCOUNTAmou�t 299.58
368 k"Y1'�i RD Oct•Nov , FACE Amount 305.69
�T7TLER, PA Z6002 PHONE 724-285-8181 DscO� t0� PENAI.TYAmoant 336.26
OFFICE WALK-INS WEDNESDAY lOAM-4PM ,ALSO REC'r � ��
SEPT 28, OC'T 1, 1VOV 30_ Q'�'Ii�R TIMES
CAL�. k'OR APPT OR MAYT. PAYM�NT. �2T 68 eturn This Portian With Payment
TLTRN' ON' EY7'H RO1�D 5TH HOUSE ON RIGHT Ow�er: �MITH JAMES W
D/M/P:�250-iF147- 30AA-oaoo
� iCc�.nrx'cr Nco. , f .50J.2-41 J.30�i
.i�`:t�:• �.g: %�� '�nx�•��•,. ry :i:.; ` ,,,. �,..
t .;��.; .'s:cbw,t,�k.'}:e+:: � "':S�:�?� �!��ryr��i w�i�y �y-s^ }} :u:>....k"<:�e. ::e'oF;;,:•,,.y�� .�c „•r.
���,, :k�• .FSi,:<.s... �-1��e ��,{ :•.;�..;...M...i>' t, w�r '�..:�: .>;�f',�, ,r�.x;3:� k,a•:.w..«^:<s:.::<a..,.�..;
.�°�.i�5�.tiF�:•�.s*• :w:�:� ���" �;�� vr{•ka �„>:e•� .�ti. �•��' ��7� �;i' ��rt`3w.>a�.:.Nt•l`:,e.�if.�.�k.y�fii•.c+s..�•:1...�� a:� .S L.
r ��a.hatsy:k.>x-�k<a��'l...M;fT..:�f:!%?i.!�.:.;?;J:1t�.�w.::,7,:,'f,.ciiF%q�f1�,v!•:� �.F �L�si.Y.i:7� >in •d.;: ,. .L:.�;:o: �> 3�.{'�. .;;;:
•�: :
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, :�• „�f„f:}1',6!�.i4.�r.�� •r,b>Ko-''':k�>:<..�`e'e :'�'w"�<§ i
. . ......�........................ :. . . . .
IF Q REC�IPT IS DESIR�D,R�TURN ENTIR�FORM AMb A SELF•ADORESSE STAMP��I�(V�L4PE WiTF!PAYMEiY7
JULY 1, 2 012 TT3RU' JUNE 3 4, 2 013 +• � - •- �
SHEFtRY L. FI7.,GES, �'1� COTrT�$C`TO� � ND 0�TAX MIELS/RATE ' AMOVN7
368 EX'Z'Fi RA SCH00 � 91.800� 305.69
�U'Z'T�ER, PA 16Qp2 PHONE 724-285-8181 AC'I' 5,�1 PC 5.00 .00
ACT 6`�9 PC S. DO _00
properry�esc: 53.1�5 ACS
E 0� BON,�TIEBROOK k�A
Assessed Vatus: 3,3 3 0
�r►��P: aso-iFi4�- so�-ooao . �
owner Aadress: SMITH JAMES W A��•sea�:�ZS'= DISCOUNTAmount 299.58
315 ROBSON RD oct-No� ;� FACEAmourrt 305.69
DILLBLTRG PA 17029 oscoi io�/o PENAITYAmounT 336.25
RECV•0 B�:
�/M/�;� �so-1Fi��- aa�-0000
Control No. : (25012-4) I306
Attent�on: REAL ESTAl"E 7AXES N07"PA/O BY I�,EG 31, 2072 � LL BE RETURNED TO TAX CLAlM
, -
��1�)���!!���1����1�l���������I�!����������I
Instr�.204205010052087 $5!$1J20t2
Fa9es:3 F:S62.00 10:02pM
Michele Mus[ello T20120018571
Butler County Recorder MLJRMES W
THIS LlEED
i`1 !
MA.T7E the �� day of ��R� I ,2012,between
J.AMES W. SMTTH, as attorney in fact for THRESSA E. SMITH, a widow, which Power af
Attomey was executed on May 31,2005{ttze Grantor"},
A
N
D
JAMES W,SMITH,(the"Grantee")
WIT'NESSE'TH,that the Cnrantor, in consideration of the surn of One Dallar($t.00}ta thern now
paid by ttte Grantee, do grant, bazgain, sell and convey unto the Grantee, their heirs, executors,
suocessars and assigns,
ALL that certain piece, parcei or tract of land situate in Oakland Township, Butler County,
Pennsylvania,bounded and described as faltows,to-wit:
Begiz�ning at a goint at the northwest comer of lot vf G. Benson, bezng a point two
hundred and sixty-four feet(264)northwardIy frorn the center of I.egislative Route 10125;thence
alang lands af H.E. Gudenbur,Narth i°06' West a distance of ane thousand seven hundred and
ninety-four and seven-tenths (1,794.7} feet to a hub an lands af Rabecca Taylor; thence alang
lands of Rebecca Taylor, John Weichey, North $9° 12' East a distance of one thousand three
hundred twenty-twa and twenty-eight ane hundredths{1322.28)feet ta a point on lands of W.J.
Hempiing; thence along line of Hempling, South 22°32' East a distance of eight hundred and
twenty-six and ninety-six ane hundredths (826.96) feet to a poznt on the north line of a creek;
thence alang said oreek in a westerly directian ta a goint; thence along line of lands of now or
fotmerly Kxebs Heirs, South 21°49' West a distance of tluee hundred and forty-two and eighty
one-hundredths (342.80} feet more or less; thence continuing along lands of now or formerly
Krebs Heirs South 1° 00' East a distance of seven hundred and twenty-ane and twenty-three
hundredths(721.23) feet ta a stone;thence along lands qf St.Wendelin's Church,North 89°33'
West a distance of four hundred fifty-fouz and sixty-seven one hundredths{454.6'7}feet to a point
in the center of a public coad Irnown as Legislative Route 10125;thence along the center of said
road a distance of thzee hundred forty-two and fi8y-seven one hundredths(342.57)feet,more or
less,to a paint in the center af said road af the southeast comer of lot of P. Fallacker;thence
alang line of lot of P.Fallacker,Narth 1"6'West a distance of two hundred and sixty-four(264)
feet to a point at tlte nartheast corner of lot of P.Fallacker;thence along lots of P.Fallacker and
Benson, South 88° 23' West a distance of five hundrad and twenty-three and twenty-ftve one
hundredths (523.25) feet to a point at the northwest carner of lot of G. Benson, the place af
beginning.
AND containing 53.145 acres as per survey of Greenough, McMahan and Greenough made
September 6,3955.
AND BEING the same land conveyed by Martin I.einenbach and L.ouisa Leinenbach,his wife,to
Eugene A.Smith and Thressa E. Smith,his wife,dated September 20, F955 and recorded in the
Recorder of Deeds Office of Butler County, Pennsylvania in Iaeed Boak 675, Page 499. Said
, Eugene A. Smith having died on October 6, 1486 vesting full title in said land in Thressa E.
Smith by operation of law.
UNDER ANI3 SIIBJECT'TO:
a. Coal and coal bed rnethane gas aztd mining rights and all rigk�ts incident to the
extractian ar devekopment of caal or caal bed methane gas heretofore conveyed, excepted and
reserved by instnunenfs of record;the right of surface,IateraI ar snbjacent support;ar any surface
subsidence;and
b. Oil, gas, and minerals, and rights incident to the extraction or development of oil,
gas or minerals heretofore conveyed,leased,excepted or reserved by instruments of record.
BEING Tax Map Parcel No.250-1F147-30AA-0000.
The Grantor certifies,pursuant to Act 97 of 1980,enacted July 7, 1980,Section 405,et seq.,
35 Pa.C.S.A.§6018.405 et seq.,that no hazardous waste is presently being deposited by them on or
in the land conveyed by this deed, nor has any hazardous waste ever been deposited to their
knowledge on or in the land conveyed by this deed. This paragraph is being inserted in this deed
pursuant to Section 405 of said Act 97 of 1980,35 Pa.C.S.A.§6018.405 et seq.
TffiS CONVEYANCE IS FROM MOTHER TO SON AND EXEMPT FROM REALTY
TRANSFER TAXES.
With the appurtenances: To Have and To Hold the same unto and for the use of the Grantee,their
heirs,executors,successors and assigns forever,
AND the Grantor for herself, her heirs, executors and administrators covenant with the Grantee,
their heirs,executors, successors and assigns against all lawful claimants the same and every part
thereof to Warrant and Defend.
NOTICE-THIS DOCUII�NT MAY NOT SELL, CONVEY, TRANSFER, INCLUDE OR
INSURE THE TITLE TO T'IIE COAL AND RIGHT OF SUPPORT UNDERNEATH THE
SURFACE LAND DESCRIBED OR REFERRED TO HEREIN, AND THE OWNER OR
OWNERS OF SUCH COAL MAY HAVE THE COMPLETE LEGAL RIGHT TO
REMOVE ALL OF SUCH COAL AND, IN THAT CONNECTION, DAMAGE MAY
RESULT TO THE SURFACE OF THE LAND AND ANY HOUSE, BUILDING OR
OTHER STRUCTURE ON OR IN SUCH LAND. THE INCLUSION OF THIS NOTICE
DOES NOT ENLARGE,RESTRICT OR MODIFY ANY LEGAL RIGHTS OR ESTATES
OTHERWISE CREATED, TRANSFERRED, EXCEPTED OR RESERVED BY THIS
INSTRUMENT. (T'his notice is set forth in[he manner provided in Secrion 1 of the Act of July
17,1957,P.L.984,as amended,and is not intended as notice of unrecorded instruments,if any)
WITNESS the hands and seals of the Grantor.
Witness: _:�,,�,�� ���'"' (Z..t.�
;!
� �-. Lr�Et�W' �(SEAL)
essa E.Smith by James V�.Smith,P.O.A.
o� ��st�ao��sofcro�av��
NOTICE THE UNDERSIGNED, AS EVIDENCED BY TI-IE SIGNATURE(S) TO THIS
NOTICE AND THE ACCEPTANCE AND RECORDING OF THIS DEED, (IS, ARE)
FULLY COG1vIZANT OF THE FACT THAT THE UNDERSIGNED MAY NOT BE
OBTAINING THE RIGHT OF PROTECTION AGAINST SUBSIDENCE, AS TO THE
PROPERTY HEREIN CONVEYED,RESULTING FROM COAL MIIVING OPERATIONS
AND THAT THE PURCHASED PROPERTY, HEREIN CONVEYED, MAY BE
PROTECTED FROM DAMAGE DUE TO MINE SUBSIDENCE BY A PRIVATE
CONTRACT WITH THE OWNERS OF THE ECONOMIC INTEREST IN THE COAL.
THIS NOTICE IS INSERTED HEREIN TO COMPLY WTTH THE BITUMINOUS MINE
SUBSIDENCE AND LAND CONSERVATION ACT OF 1966.
`�'�,�.,,�,�.,� . `°��__... ` C
COMMONVi�EALTH 4F PENNSYLUA.2�II� .
. ss.
CfJUNTY OF DAUPHIN .
On this the ��� day of r 1{?��! , A.D. 24I2, before me a notary
public the undersigned afficer, personatly appeared, Jttmes W. Smith, known to me (ar
satisfactorily proven)to be the person whose name as attomey in fact(agent)far Thressa E.Smith,
and aclmowledged that he executed the within document as the act of his principal for the puzposes
therein cantained.
IN WT'TNESS WHEREOF,I hereunto set rny hand and official seal.
������. �� �
Notary Public
Mycornmission expires: e�'(I�Jy
t�1MMpNW�q
N�ut�seat
Melissa M.Kdf�,N�Y publk
S�s4ueturu�s Ttpt.,pauPh�n CAUnty
����0�s Aug.31,2424
CERTIFICATE 4F RESIDENCE
I,da hereby certify that precise residence of ttte Gzantee is
7ames W.Smith
315 Robson Road
Ditlburg,PA 17Q19
Witnessmyhandtk�is t7��' dayof ���'t ,2012.
,�l �—..
���.�,.r'�.��.�--� �
COMMOIVWEALTH QF PENNSYLVA2�TIA .
:ss.
COtJN'1'Y OF BUTLER •
Recorded on this day of ,A.D. 20 ,in the Recarder's
Office af Butter County,Pennsylvania,at Inst�ument No.
Given under my hand the seal of the said affice,the day and year aforesaid.
Recorder
IV�II.TO: ��$(4by CBRTIFY
lNd�ih4tl d&GUment is
�Qed in tlK
��C�'�a Ot'[ice
James W.Smith ors�utuc«,n�r,
315 Robson Road PO"�'�°°"'a
Dillburg,PA 1'ldl9
Michela M.Mastello-Rcco*dc�of ikr!Is
Shell Exploration & Production
SWEPI LP
190 Thorn Hill Road
Warrendale, PA 15086
724.720.2366 office
724.720.3551 fax
terence.estes@sh el I.com
May 17, 2012
James W. Smith
315 Robson Road
Dillburg, PA 17019
RE: Updated Ownership
Lease# PA24087.001
Dear Lessor:
It has come to our attention that the oil and gas interest in the above-listed lease has been conveyed to
you. This letter serves as confirmation that we have updated our records. Additionally, enclosed
please find a W-9 tax form. For legal and tax purposes we need to have this form signed and on file
with the above referenced lease. Please sign and return the form in the envelope provided.
Should you have any questions, please give the undersigned a call at (724) 720-2366.
Very truly yours,
�l
r
i
f.
:�
Te�i stes,,JD
Lec�e Analyst
enclosure
� PA PAID�LEASE IIIIIIII IIIIiI IIII III IIII I Il I IIIIIIIIIII I III Le�e No. �9a�io���o l
Rev.06.09.2011 Instr.201709280023436 09/28/2011
Paeas:l F:$18.50 2:50PM
Michele Mustello T20710032695
Butle� County Recorder RP
MEMORANDUM OF LEASE
THIS tvIEMORANDUM OF LEASE has been made to indicate the existence of an Oil and Gas Lease("Lease")
dated�}��'�i" (�j ��1� by and benveen Thressa E.Smith.a widow of 315 Robson Road
Dillsbure. PA 17019 as Lessor and SWEPI LP, having an o�ce at 190 THORN H[LL ROAD, WARRENDALE,
PENNSYLVANL4 15086,as Lessee.
Lessor did grant,demise,tease and let cxclusively to Lessee,its successors and assigns,the rights to explore,develop,
produce and market oil acid gas from the premises described below subject to the provisions contained in the Lease including the
following:
1.The primary term of the Lease is for a period of Five(5)years commencing on the date immediately set forth above and for so
long thereafter as oil,gas or other substances wvered by the I,ease are capable of bcing produced in paying quantities from the
leased premises or from lands pooled therewith or the Lease is othenvise maintained or prolonged pursuant to the provisions
contained in the Lease,including an extension of term contained therein. Lessee may cxtend the primazy term of the Lease for an
additional Five(5)years after the end of the primary term,thereby continuing the term of the Lease to the end of the extended
primary term.
2.All that certain tract of land situa[ed in the Township of Oakland.County of Butler Commonwealth of Pennsylvania,genera(ly
bounded now or fonnerly as follows:
On the North by 250-1 F147-0000029G-0000 Richard A Eakin
On the East by 290-IF102-0000001A-0000 Stephen C.Malis
On the South by Saint Wende(in Road
On the West by 250-OOOS4-0OOOOOOC-0000 Richazd A.Eakin
and for rcference purposes only,being Counry Tax Pazcel No.250-iF147-000030AA-0000,being the same uact of land acquited
by Lessor by virtue of a documcnt recorded in the office of thc Recorder of Decds in said couniy in Pennsylvania,
Deed Book 675 and Page No. 499 and s[ipulated to contain, for the pu�pose of calculating payments,
Fiftv-Three and 15/100 f53.151,acres,moce or less.
7t�is Memoiandum of L,ease has been executed for the purpose of providing notice in the Rewrders Officc of
Butler County, Commonwealth of Pennsylvania, of the existence of the Lcase and shall not be considered in any way a
modification or alteration of the Lease. �
The parties have executed this Memorandum of Lcase this�` day of_��%�Z�if/ .2011.
��� ' SSOR: �
/ �_ ��
�,, 1 heraby CElCtIFY
t�d�dooument is
tecorded In the
Reco�du's Office
�y� ofgutkrCounry. SWEPILP
Pennsylvanix
Michele M.Mustello-Recorder o�ds ��/ /�
Iu: L�ilc�- /(e.r1/'�S�N�A�`i(��
Standard Acknowledgement
COMMONWEALTH OF PENNSYLVEWIA }
}ss:
COUNTY OF �-y'��-� }
On the ����day of �1.��e{'Y�� in the year 20 �� before me,the undersigned,a notary public in
aad for said state,pecsonally appeared��(i(r�z.� V v ^ . ��( 1_�,
personally known to me or proveA to me on the basis of satisfactory evidence to be the individual(s)whose name(s)is(are)
subscribed to the within insUument and acknowledged to me Utat hdshdthey executed the same in his/hedtheir capacity(ies),and
that by his/hedtheir signature(s)on the insuvment,the individuat(s)or the person upon behalf of which the individual(s)acted,
executed the insTiument.
IN WITNESS WHEREOF,I hereunto set my hand 'a se l.
^
RETURN TO PRESENTER —
No[ary Public
COMMONWEA�-TH OF PEPlNSYLVANIA
� NotaAal Seal
q Hdly A.Mechek Pbtsry�dic
Butler Twp.�Butler Caunly
� p�y Comm�syion Expires Aug-4.2013
Member:Pen�sylvaNa I�soAatlarr of iJoWAes
PA PAID UP LEASE Lease No.j�/�_.�y("�,_Z,�:;�
Rev.06.09.201 I
\
PAID UP
(�IL AND GAS LEASE
This I,aase Agreement is made and entered into this���"day af���(,��'Ln�n+ .20 f i.
Y
between Thressa E.S�nith,a widow,of
325 Rabsan Road
Ditlsbur PA 17019
as Lessor, (whether ona or more), and SWEPI LP, tiaving an oftice at 190 TIiORN HTLL ROAD, WARI2ENDALE,
PENNSYLYAIYIA 15Q$fi,as I,essee_
(1)[,EASE-In considdraYion of the bonus consideration paid,the receipk of which is hereby acknowledged,and in
fiuther consideration of the covenants and agreemtnts herein contained, Lessor does hereby grant, demise, lease and let
exclusively to I,essee,iLS successors and assigns,the Iands hereaSer described far the gurpose of exgIoring for,developing,
producing and marketing oii,gas or otha related sabstances prpduced in association therewith by ait methods now Irnown or
hereafter known or hereafter discovereA,in and under tkte following described lend:
{2) DESCRIPTI4R - tllI thai certain tract of (and situated in the Township of Qakland, Butler County,
Comrnonwealth of Pennsylvania,generally bounded now or focmerly as follows:
On the North by 250-IF247-0OQ0029Ci-0000 Richard A.Eakin
On the East by 290-IP102-OOOp001A-OQ00 Stephen C.Malis
On the South by Saint Wendelin Road
On the West by 25Q-OOpS4-OOE)40IX}G0pt70 Rnchard A Eakin
and for reference purposes ooly,bcing County Ta�c Pazccl No.250-1�147-0lp03QAA-OOQQ.being the same tract of land acquired
by Lessor by virtue of a documcak recorded in the affice af the Rxorder of Deeds in said counry in Pennsylvania,
Deed Book 675 and Page No. 499 and stipulated to contaia, for thc pu�posa of cslcula[ing paymenls,
Fiftv-Three an8 151200 f53.15).scres,more or iess,and horeinafter catled"Icasecl premises°.T2ris Iease includes aIt accreted or
submerged lands contiguous to the leased prernfses claimed or owned by Lessor.
{3}TERlt3-Subject to the other provisions cantained horein,rhis lease shalt be in force for a primary term of 5ve(5)
years and for so Iong thcrcnfter as ail,gas or ather substances covered hereby are capablc of being produced in paying quantities
from Ure leased premises oc from lands pooled therewith or this lease is otherwise maintaineA pursuant to ihe provisions hereof.
It is understood Uiaz so tong ss this lease is oxtended beyond Yht grimary tecm by aay provisian af this leau,Lessce may
commence,resume,or conti�ue the cxercise af any of the righu,privileges or purposes hereof during such oxtension.
EXTENSION t7�TERIl3: At Lessee's option,F,essee may extond ihe primary term of this iease far an additional
periad equaI to the primary term by paying or tendering to Lessar an e�ctension payment of
Three Thousand and 00/100 Dollars 3 OW. per acre payable at any time prior to the expiration of the primary tcrm.Tf
Lessec exerciscs this optian,the primary term of this lease shal!be considered to be continuous,commencing on the date hereof
and continuing to the end af ihe c:Rended gricntuy tecm.
(4)ROYALTY`PAYMENT—On oil and gas,along with all hydrocarbon and non-hydrocarbon substances produced in
assnciaYion therewith,(e�ccept storage gas}Lessee shaii deGver to Lessor,as royatty fifteon percent(2 5%)af thc groccods(less ait
appiicable excise ta�ces, including prodaction, seve:ance and wiadfali profits ta�ces, and less transpartation, campression,
dchydrasion and gathering costs,if any)realized by Lessee for that produced and markctcd offthe leased premises.
(5)LESSQR'S 1NTEREST-If Lessot owns an interest in tlte leased premises less than the entire snd andivided estate
hereia teased,then all payments herein provided shal[be paid by Lessee onty in the proporcion to which L,essar's interest beazs to
tl�e whole and undivided ostate. If the leased premises shall hereafter be suhdivided,the leased premises shall ncvartheless be
developed and operated as one lease,and all royalties aceruirsg hereunder shatl be tr�ated as an entuety,and shall be divided
among and gaid to such segarate owaecs in the proporTion that the acreage owned by each owner besrs ta the entire teased
acreage. I,essee shalt not be bound by any change in the awnership of the leased promises or any change of the address of Lessor
until Cumished with such documentatian from Lessor as Lessee may reasonable require.
(6) DIRECTIUN OR PAYMEN'I'—Ali paymenu herein may be directed to the Lessar ar deposited ta T,essor's credit
or to the credit of Lessor's respective 6eirs or assigns by aheck payable to thc order and address as set forth ahove.
Lesseo shal!not be obligated to alter paymenzs as directed above unless with written notice by Lessor or I,essor's heirs or assigns
direct I.,essee otherwtse.
(7)CONTINUINC OPERATIONS—If at Ute end of the primary term or any extension therwf this lease is not being
kepi io force hy any ather provision hereof but Lessu has sommenced aperatioas far dritling,completiag,reworking,equipping
or any other operation cslcutated to aboun graduction on the leascd premises or lands pooled therewith,this tease sha21 remain in
force as long as such operations ere conducud in a masonably prudent manner. At any time aftar the enpiration of the primary
tenn,this lease is not being kept in focce by any otha provision hereo�Lessor agroes to eutend the term one yeaz beyond tho
comple�ion of plugging operations of the last wc1!on leased premises to perniit Lessee ta deepen,c�mrk or c�omplete said weIS
or to commence operatians for Uie driiting of another welt and if such operations result in the production of any substance
covered hereby,this leasc will be extended as long thereafter as productiort cpntinues in paying quantiries.
{8)POpLIPIG<NPfIZA`FION-Lessee is heroby granted tho right to perot or unidze the Iausad premises,or any
part khereof,with any other properry for the praduction of any substance covered hueby,so as to croate pne or morc drilling or
production units. Furthermore,Lessee shall in no event be requirec!to dril!more than one well un such unit Said drilting or
1
PA PAID UP LEASF-, Lease No.
Rev.06.09.2011
production units shalt not axceed one Yhousand two hundred eighty{t,280}acres ar such size as may ba permitted to confarm to
ttie rules and regulations of any govemmental agcncy ciaiming jurisdiction.In the event this lease is so unitized,the Lessor
agrees to accept in lieu of the royalty herein before recited, such proportion of the royalty a6ove provided as the acreage
cantributed by this leasa bears to tha tatal acreage cpmprising the unit.
Lessee shall create the unit by executing an instrument identifying and describing the poofed acreage and shall maii a
copy thereof to the Lessor's last lmown address.Lessoe shail have the recuning right to revise any unit formed hereunder either
before or af}tr wmmencement of productian.tn the event of a revision,Lessee shall execute a written instrument describing the
revised unit end stating the effective date of the revisioa Lessec shall mail a copy thereof to the Lessor's last i�own address and
the proportion of unit production on whieh roya}ties are payable hezeunder shail theceafier be adjusted accordingly.Lessee may
terminate the unit by ft2ing of recard a written declazation describing the unit and siating the date of termanatian.
Cpmmenctment of operations for dri(ling, wmpleting,rewarking, equipping or any other uperation calculsted ta
obtaia productiun,or production atiywhere on a unit which irtcludes a21 er any part of the Ieased premises shai2,e�cecpt far the
payment of rayairies,be ucated as if it were commencement of operations for dril3ing,comp(tting,rewarking equipping or any
other operatian calculated to obtain production,or prpduction on the leased premises. �
��
(10)ANCIL,I,ARY RIGH'1'S-Lessor grants to the L.essee tha right of ingress and egress over,under and through said
lessed premises with tho exclusive right to conduct such operations on the leased premises as may be neoessary for the
expioration and production of ail,gas or other related substances coverecl hereby,inoluding bnt not Gmized to geuphysical
operations,the dritling of wetls,and the construcrion and use af roads,pipelines,tanks,water wetts,disposal wtlis,injection
wdls,pits,tlectric and kelephone lines,and other facilities necessazy,usefitl or convenient to produce,save,take care o�treat,
pracess,store and Vansport oil,gas and other products with the righi to trazisport by pipelines or otherwise,oit,gas,water and
their constituents from the leascd pramises and ather lands regardless of the source of such substances and the ratctusive right of
injecting water,air,brine,gas and other fluids into sabsurface strata I.essee shalt also have the rig6t of placing electric and
ulephone lines over the leased premises;thc right to crect necessary bui(dings,tanks,towers,stations or ather struchues thereon;
tht righE!a use free&om myalty sufficieztt oil,gas and water produced from the leased prernises for all ogtralions thereon
(provided it finds water at ets own axpense).
The kerm"gas"as used herein includes helium,carbon dioxide,gaseous sulfur campounds,meri�sne produced firom
eoat focmations and other commercial gsses,as well as nocmal hydrocarbon gases ineluding easinghead gas.
Lessee az any time,and from timc to time,may surrender this lease as to a(1 or any part the�eof by recording an
appropriate instnzment af suirender in the proper county and thereupon this lease and the rights,rentals and obligations of the
patties hereunder shail temeinate ss ta the part so sucrendered:provided however,that upon each surrendtr as to any pact of ihe
lesse,Lessee shall maintain such easements rights to ihe surronderod partion ae may be appropriate to its cnjayment of the
portion not surrendered.
When roquestod by Lossor in writing,L�ssee shall bury iu pipelines belaw plow depth in areas utilized for farming
operations.No well shall be located wiffiin two hundred(200)feet from any house now on the teased premises without Lessqr's
consent and I.essee sha!!pay for reasonsbla dsmage eaased by its operations to growing caaps and mazketsblc timber therean.
Lessee shall have the right io remove iu$xtures,equipment and materials,including well casing,from the iea5ed premises
during the term of this lease and within a reasonable time thereafter.
{I I}SHVT-IN ROYALTY—If aRer the primary term of this ieasc,ali wetls on tht teased premises or within a unit
that indudes at!or a part of the ieased premises,are shut-in,suspended or olherwise not produoing for any reason whatsoever for
a period of twelve(12)consecutive months,and thore is no cutrent production qf oil and gac or operations an said leased
premises sufficient m kxp ttvs lease in force and S3vs leasc is nat othrxwise kept in farce by other provisions of tbis lease,Lessee
may maintain ihis leasc in effed by tendering to I.essor as shut-in royaTty,a svm equaF W five dottars{SS.QO}per acre.Said shut-
in royelty shall be paid or tenderod to the L�essor on or beforo trta next ensuing yearfy annivarsary of the date of this lease,a�d
thoreafter on or beforo each yearly anniversary of the date hcroof while tho wells are shut-in or production therefrom is not being
msrketcd by I,tssee.Upon paymtatt of She shut-in noyalty ss provided horein,zhis fesse wi►2 continue in forcc during aIi of tkte
time or times while such welts are shut-in but faiture to properly pay shut-in royalties shalt ronder Lassee liable on(y for the
amoant due aad shall not aperate to uaninate this lease.
{t2}TAXF.S—Subject to paragraph faur{4)above regarding past-productian costs all taaces assessed or paysble on the
oil and gas including any ad valorom,produetion,severance,business,occupadon or other e�ccisc taxes or any increase in the reat
estate taxes,ar taxes in lieu of real rstate tanes imposed 6ecause af the oil and gss operations under this lease shalt be paid by the
paRies herexo in proportiou ta their interesG
(13)[.IENS-I:.essee may,at its bpkion,pay and dischazge any past due taues,moRgages,judgments,and/or other lians
and eacumbeances on or sgainst any land oe interest included in ffie Leasehold Lessce shall be entikled to recover any such
amounts gaid from Less�rr,with legal inteatst and costs,hy deduction fivm any future payments to Lessor or by any atha lawful
mcans.
{14}�RCE MAJEITRE—Should Lessoe ba prevented from camplyin$with any oxpressed or imptied covenant of
this t�se,finm conduding drilling,ar re-working operatians thenron or frpm prcrducing oil and gas or ofher snbstances by reason
of scarcity of or inability to obtain ot use equipment,men or material,or by operation of force majeure such as storm flood,firc,
oc other acts of God,waz,rebellion,insuexectian,riot,shikes,differences with wackmen or failure of earriers to transport or
furnish fsciiiiies for transportaYian,or as a resutt af a lawsuit or some Iaw,order ar regulation of the governmen;or as a result of
shorkage in ms[erial or equipmeny or as a result of any cause whatsonver beyond the contrpt of tht Lessee,ttien white so
prtvented,I.cssee's obligation to pomply wi#h such covenant shsll be suspcnded for so long es compliance is thus prevented and
for suc(6?months thereaftu.
z
, Y PA PAID UP LEASE Lease No.
Rev.Ofi.fl9.2011 � �
(15) DEFAULT-No default shall be declared against the Lessee for failure to make payment or perfomi any
conditions prnvided for herein unless the Lessee shali refuse or neglect to pay or perform the same for sixty(60)days after
having rece[ved written notice from Lessor,
{16)SUCCESS4BS AND ASSIGNS-Alt covananis and conditions between the parties hereto shaEt a�ctend to their
heirs,executors,successors and assigns and the Lessor hereby generally warrants and agrees to clefend the titlo to the leased
gremises,but no chsnge or divzsian zn ownership of the leased premises sital!operate to enlazge the obtigazians or diminish the
rights of ffie I,essee.
(17)ACCEPTA]YCE- This lease contains alf of the agreements and understandistg of the Lessor and Lessae
respecting the subject matter hereof and no implied covenants or obligations,or verbal reprasentations or promises have been
made or relicd upon by Lessor or Lessee supplementing or modifying this lesse or as an inducement thereto.
{I$}WAIVER IN WRITIlVG-T'he failure of either puty to enforce or exereise any provision af this leasa sha2t nat
constitute or be considared as a waiver of the pravision in the future unless the same is expressed in writing and sig�ed by the
respective pacties.
Sea attached eddendum for sdditional orovisions.
IN WiTNESS W�IEREOF,the panies have hereunto set their hands and afficia2 seats the date first written above.
WITNE3S: LESSOR:
�r�..c^� " ..?""_">.�.—_"!L ��yt�..�"' �
Print: ��'�ir%�S���ir��9`�`�'°.�...1� P mt:Thressa E Smith
hone#:
Print: Print:
Phona#:
Standard Acknowledgement
CdMMOI�IWF..AI.TH OF PENNSYLVANIA }
` }ss:
C4?UNTY�F `t"IR-(' }
On the_,���,_day af in tha year 20�before me,the nndersigned,a notary pubtic in
and£or sa"sd sEate,pcssona(IY aPPeared � G�t!'Y�2� ((}. �'('�'1�(��
pecsonally lmown to me or proved to me on the basis of satisfadory evidence to be Ehe individua!(s}whose name(s)is(are)
subscribed to the within insm�ment and aclmowtedged to me that helshelthey exacuted the sama in his/her/their capacity(ies1,and
tttat by his/her/their signature(s)on the instrurnent,the individua((s)or the person upan beha(f ofwhich the individual(s)acted,
executed the inshumenL
IN WIT'NESS WREREt}F,T heceunta set my hand and offioiai seal.
�� ��'/ / �.�'�Vic_`�'._""_.
Notary Public
CD'N,Pt���`Ttt OF PENNSYLVANtA
. NotaAs�Soad �
FWtlY��P1°te`ry
gWer TvP•.Buhei'�P413
t�v�re�'°" ��e�a,�r���
Mesmber.PenneYfi'
3
. t
Lease No.
ADDENDUM
Attached to and made a part of that certain Oil and Gas Lease
Dated:,�T' . ! l� �v'l/
By and between:Thressa E.Smith,a widow.
And
SWEPI LP
In addiGon to provisions previously set forth in the attached Oil and Gas I.ease,it is hereby agreed that:
1. �on0ict of Terms: In the event of a conflict or inconsistu�cy behveeh fhe printed terms of this lease and this addendurt4 the printed terms
of this addendum shall control and bc decmed to supersede the prin[ed terms of the lease.
2. Locafion Consultation:Lessee agiees to consult with the surfece owner regarding the placement of all well sites,roads,flow and pipe
lines,taok batteries,and other sVuc[ures,and to locate all of them a[such locations that will minimiu the interference wi[h the surface use
oftheland.
3. DEP Comoliance:Lessee's opera[ions on said land shall be in accordance with regulffiions set forth by the Pennsylvania Deparvnent of
Enviroomen[al Protection.
4. Wster TesNne:I.essce shall tes[LessoPs domestic water supply ac to quality prior to commencemen[o�and following,drilling operations
oa said land in order to ensure that said wa[er supply is no[adversety affected by said operations. In the event it is determinod that said
opera[ions have adversely affected said water supply,then Lessee,a[its own expense,shall take all steps necessary ro re[um said water
suppty az near as reasonably possibk to pre-0rilling wnditions.
5. Minimlze Soil Erosion:Lessee shall construct or install all we11 sites,access roads and pipeline rights-of-way in a manna which would
minimiu eny ttlated soil erosion. Fwiher,any related surface reclamation shall be done in a manner which restorcs said land as nearly to
original contours as roasonabty possible.
6. Renlace Fences:I.essee shall prompUy replace any fences and gates removed by Lessee during its opera[ions on said land and further,shall
construa getes on ell access roads on said land upon written request by Lessor.
7. Governmrntal Pro¢nms:l.essee agrees ihe[if any penalty,rollback or`c-capture of tax abatements createA or imposed undtt any
govanmental program such as,but not limited to CREP,CRP and C(ean and Green that is levieA on Lasor solely as a result of Lessee's
operations on leased premisa,I,essee will reimburse I.eswr upon written request and receipt of a copy of the penalty notice.
8. Well Loeetion&Acasa Road Fee:Upon I.essor's execu[ion of a Release for Individual Well Site,Lessee agrees to pay Lcssor a loca[ion
fee in dx amount of Fifteen Thousand Dollars and 00/100(515,000.00)for each pad const�uaeA on tho surface of the Ieaced premises and
- the access road(s)constructed in associazion ffierewith for the purpose of drilling horimntal gas wetls.
9. Hold Harmless:l.essee shall indemnify and hold Lessor harmless from any and all liability,liens,demands,judgnents,suitt,and claims
of any kind or charac[a arising out o�in connection wiffi,ar rela[ing to Lessa's operations under the tertns of this Lease,including,but not
limitcd to,environmental issues,claims for injury to or death of any persons,or damage,loss or destruction of any property,real or
personal.Lessce further covenants and agras to defend any suits brough[agains[Lessor on any claims,end to pay any judgment agains[
I.essa resulting from any suit or suits erising from Lessee's operetions wder the tums of ffiis lease. I.eswr,if it so dects,shal!have the
rig6[to participa[e,at i[c sole ezpense,in its defense in my suit or suits in which it may be a party,without relieving Lessa of the
obliga[ion to defend[.usor. !t is the intention of Lessee end Lessor that Lessa shall not be liable ro Lessor in respect of(and the foregoing
indannity shall not cova)any claim to the exten[the same resulted&om the gross negligenco,willful misconduc[or bad faith of the
I.assor.
10. Notice of Brach:If Lessee violates,fails to perfortd;or breachcs any mahrial tams,covenants,or conditions in this leese,Lessor shall
notify Lessce in writing of wch violation,failure,or bresch. L.essee shall have a period of sixry(60)days from the date of its receipt of
Lessot's written notice,in which to remedy the material violation,failure,or bceach. If Lasee faiLs or refuses ro remedy the materiel
viola[ion,failure,or breach within ffie prescribed time period,I.essor may,et its sole optioq termina[e ihis Lease as to all of the lease
prcmises.
11. No Forcieo Pioelinp:Without a separate written agrcemen[pipetines,except for those used to transpoR oil and/or gac from a well(s)
drilled on leaced pranises or lands pooled therewith,shall not be constructed on the leased premises. �
12. P�u h Clausc:In the wmt a poo�ed uni[or units nre created pursuant ro the terms of this Iease which rncompasses lands loca[ed oucside the
Itased premises and somq but no[al(,of the leaced premisu is included,[hen i[is understood and agreed thaz the drilling or reworking
operations on or produc[ion frao a well loca[eA upon su�pooled unit shall continue this lease in full force and effxt unda its tetms bu[
only as to that porton of tho Leased Premises contained within such pooleA mits. For that portion of the Iease not included in a unit or
extended by ury oWer provision of the lease az the end of the primary[erm,Lessee may eac[end the primary term for an addilional period
equel to the primary tum by paying or trnduing to Lessor,prior to the expiralion of the primary term,an e�ctension payment of Three
Hundred and 00/100 Dollars(5300.00)per acro, 1f Lessee excrcises this option,the primary trnn of this Lesse shall be considasd to be
eontinuous,commenciog on the etiective date of this Lease and continuing w the end of the extended primary tum. ff Lessa e(ects not[o
uercise this option,tl�en at the end of the primary tum and upon written no[ice of Lessor,I.�ssee shall surrendu such portions of leaced
premisos not contained within peroled units.
I3. Gas S[onee:NotwitAstanding anything to the cnntrary contai(red in the I.ease,Lessee is not granted any right wharsoeva to use the
leauhold,or any poetioa tl�ereof for gac storage pwposes. If Lessor wishcs to entcr inro an agiccment`egarding gas storage using the
lessed prcmisa with a fhicd party.I.essor shall first give Lessee written notice of the idenNty of the third Party.the price or the
considaation for which the third paRy is proparcd W offer,the effeaive date and closing da[e of the transac0on and eny otha infortnation
mspecting the hansadion which I.essee believes would be material to the exercise of thc offcring.Leswr does 6weby gnnt Lsssee the 6rst
option and right to purchase the gas storago righu by matching and tendaing to fhe I.essor any third party's offering.Nothing in this
� paragraph mquira Lesxor ro givo or ull suc6 storage rights.
I4. Rovalfies Without Deductlon:Royalties shall be paid witNout deductions for the costs of producing,gathering,storing,separa[ing,
tr�ating,dehydrating,compressing,hansporting,or othawise making the oil and/or gas produced from thc lease prcmiscs ready for sale or
Lease No.
use.Atl oit andlor gss royalry shati be dolivercd free of cost into tho tank or pipetine(for qit)and inta the pipeline(for gas},with the
exception of Lessor's prorated share of taxes,measurod by volumt,on the oil and/or gas royalty.
15. Timber Ciause:t,essee snd Ltssar agree that prior ta Stse rcmova!pf aczy snd a[i mazkatable timbu resulting fram Lessee's operations
under the{crms of this tease,an appraisai shail be conduceed by a quatified third party fares[er and L,essee shali pay Lasor ths said
appraisal value prior ko harvesting.
Ib. Ftnce pmduciae Wdis:Upon wt3ttea request from Lessor,Lessu sha2L{a)fe�ce ati producing wetts,cank batterirs,pits,separstors,drip
sta6ons,pump engines,and other rquipment placed on tha ieasa premises,with a fence capabte of tuming shecp,goats,and cattle;(b)koep
[he fencts on the Ieasa premises in good repair,and(c)kcep all gates and fences closed at all times,or in lieu of gstcs,install cattle guards.
11. Restoce Premises Yo Pre-drillin Conditi r�ns: On completion of any aguation,Lessce shalt restort the Seese premises as neasly to
origina!contours as rr.asonabty possibie,remove ali debris,equipmcnt,and personai property which Lessee placeA on thc�east premises
(excep[for equipmtnt needed for the operation of produning wells,which shall be mmoved within six(6)months[weathu pamining)after
a well portnanen{ly aases to praduce).
l8. Warnniv qf Titic: It is understood thaz Ltssor warcants titie to said property oniy in respects that tlro tiUe is good to the bast of Lessor's
�owkdge and Lusaa agrees that no claims wiil be mado against Lessor pertaining to wazrau�ty of title.
19. rto#ite af Assi¢amenk of I.east:I,essa sha(1 notify I.RSSOr in wciting if Lessa assigns att or s portion of this lesse,or an undivided interest
theain,to a third party, Pmvided,however,that notice to the Lessor shali no[bc requirod in the evonk of an assignment by Lassee:
a to an nt£�liate,subsidiary,or in[ernal partners;
b. in cansequence of a mergec or amaigamation;or
c. of at]a substantislty atl of its assets w a third party
20. 5 vnr Shuhin limit:Notwithstanding anything ro tht convary hcrein,it is understood snd agrad that this lease may not be maintainod in
force for any continuous period of time longer than five(S)consceulive years aRer the wcpiration of the primary tecm haeof sotdy by ffie
provision af thc shut-in royalty ciause.Isssee shall tasdar sn�di6onal paymont of S25 p�r�ro at the asd of the third year snd each ycac
thereatter while the tnased premisos are shut-in.
ZL Uil&Cas Onh: This Leasa shalt covu on2y oit and gas and related hydmoarbons thet may bt produced through the well bore;and a1E
Wha minerals.including,but not Eimited W.Iignite,caal,urm�ium.su3phur,gravel,coFPa,snd meta3tic ora sre not indudes in tfiis Leaxc.
22. Ad Valorom Taxes:In the evcnt thue is a change in Pennsylvenia tax code that provides fur an inerease in ad vatorum ta�cts attribuhable to
or resulting fran the nssessment of oi!and gas due to oi!aad gas productim&om ihe leased premises,Lessor and Lessee egree ro abide by
the law and pay their prapatianal sh�e scrnrdingiy.
23. Relnse L,ease: Upan termination,expiration or swrender of this lease in whole or in part and upon written requast by I,essor,Lessa shall
provide t..essor with a capy of an appropriate ceiease of lease.
2A. !Vo Centr�t Processine Facilitv: Lessee sgrees that the Leased Premises dtscribed herein will not bc used as a central processing facility
ar storage azea for equipment md matuia�s axcept whan said eqaipment end materials are being uscd in drilling and produaion operatipns
on tlu Leased Premises or lands pooled tlurewith.in the ovent Lessu needs to instat3 compression in orda ta marka Uu gas from any weti
tl�at may be situsteG upai the Leased Pranises ar tands paole�tlraewixh,Lessa is grante+i thc right under this L,case to instatt a weithcad
comp`essor unit for the sole purpose of sssisting with the pruduction from sud�well or wells only. in.no even[is Lessee granted the right to
install a larger regional compressor site upon the hereia Leased pr�mises if thak compressor is to be utiliud for okher well sites not situated
upon the herein Leastd Premiscs or lands pcwled themwith without fusi having mgotiated a scparate compressox sitc agtument from the
Lsssor.
25. udik Lossee furthcr grants W Lessor the cight annuslly to examine.audit,or inspect books,recards,and accounts of Lessee pertinent b
the Pn�pose of verifying the accurscy of tht roports anet statements firmished to Lessa,and for checking tlu amount of paymsnts taw[utly
due she I.essor under the tenns af ihis sgrecmeat (n eaceraising this right,Lessor shaiE give reasonabie notice ta I.essee of its intended audit
md such audit shall be conducted during normal business hours a[the office of I..essee.
This addendum shali twt affect tlic terms and condifions set fo�th in the att�hed lease in nny maoner except as sct forth hacin.
� �
�,:� :
. ���-:� p��,��yt���,T�
DEPARTMENT ClF REVE[VUE
INHERITANCE TAX BULLETIN 2012-01
Issued: July 10, 2012
Revised: ]uly 13, 2012
Taxation and Valuation of Mineral Rights and Natural Gas Interests for
Pennsylvania lnheritance Tax
Under provisions of the Inheritance and Estate Tax Act of 1991, (72 P.S. §§ 9102, 9121),
the Secretary of the Department of Revenue ("DepartmenY') announces that the
Department has clarified existing Department policy concerning the taxation of mineral
rights and natural gas interests for Pennsyivania inheritance tax purposes. Ail mineral and
natural gas rights shall be reported on Inheritance Tax Schedule E (REV-1508) as Cash,
Bank Deposits & Misc. Personal Property. The Department clarifies its policy as follows:
(1) The taxable value of mineral rights shall be determined using the same
methodology used to value any real property or tangible personal property
interest. Taxable value is established by determining the actual monetary
worth of the interest determined by either a bona fide sale or, if the transfer
is for no or nominal consideration, computed value (based on the common-
level ratio applied to the assessed value of the mineral right). In the event
that there is no sale and no computed value, then the taxable value is the
interest's actual monetary worth, based upon the best availabfe evidence.
(2) The taxable value of natural gas rights shall be determined using the
same methodology used to value any real property or tangible personal
property interest. Taxable value is most clearly established by determining
the actual monetary worth of the interest determined by a bona fide sale. If
there is no bona fide sale, natural gas rights can be determined from an
appraisal or other credible evidence. A computed value using assessed value
cannot be accomplished because natural gas rights do not have assessed
values. Therefore, absent a bona fide sale, an appraisal or other
credible evidence to the contrary, value shall be determined as follows:
(i) For leased and producing properties, an estate shall value
natural gas rights at an amount equal to any amounts received
that were attributable to actual production of the natural gas
interests at issue during the twelve months prior to the
decedent's date of death, multiplied by two.
(ii) For leased, non-producing properties, interests shall be
reported at a value of zero unless, at the time of death, the
properties were part of a contractual arrangement whereby the
properties generated fixed future payments, in which case the
Bureau of Individual Taxes � P.O. Box 280601 � Harrisburg, PA 17128-0601 � 717.787.8327 ( www.revenue.state.pa.us
Page 1 of 2
natural gas rights shall be calculated by reducing the fixed
future payments to present value as of the decedent's date of
death using established Internal Revenue Service actuarial
tables as found in IRS Publication 1457 Actuarial Values Table
B, Section 3 Annuity, Income, and Remainder Interests For a
Term Certain.
(iii) For non-leased, non-producing properties, interests shall
be reported at a value of zero.
CONTACT INFORMATION
PA Department of Revenue
Bureau of Individual Taxes
Inheritance Tax Division
P.O. Box 280601
Harrisburg, PA 17128-0601
TEL: 1.717.787.8327
www.revenue state pa us
Bureau of Individual Taxes � P.O. Box 280601 � Harrisburg, PA 17128-0601 � 717.787.8327 � www.revenue.state.pa.us
Page 2 of 2
EX�ll�lt `����
NOTICE OF INHERITANGE TAX � pennsy�van�a
BUREAU OF INDIVIAUAL TAXES �PPRAISEMENT, ALLQWANCE dR DISALLOWANCE ; DEPARTMENT OF REVENUE
TNHERITANCE TAX DIVISIQN OF DEDUCTIONS AND ASSESSMENT OF TAX
REY-1547 pC A�P t03-13}
Pd BOX 280b01
HARRISBURG PA 17128-p601
DATE Db-Q4-2D13
ESTATE OF SMITN THRESSA E
DATE OF DEATH 07-iQ-2012
FILE NUMBER 21 12-D858
CDUNTY CUMBERLAND
�INDA J OLSEN ESQ A�� 101
STE 202 APPEAL DATE: 08-03-2Q13
2000 �INGLESTQWN RD (SeereversesideunderC76jections}
HARRISBURG PA 17110-9347 Amount Remitted�- ����
MAKE CNECK PAYABLE AND REMIT FAYMENT T0:
REGISTER OF WILLS
1 COURTNOUSE SQUARE
CARLIS�E PA 1?013
CUT AIONB THIS LINE � RETAIN l.OWER PDRTION FQR YOtlR RECORDS E�-�
-------------------------------------------------------------------------------------------
REV-1547 EX AFP CO2-13) NOTICE OF INHERITANCE TAX APPRAISEMENT, ALLOWANGE OR
DISA�LOWANCE OF DEDUCTIONS AND ASSESSMENT QF TAX
ESTATE OF: SMITN THRESSA EFI�E N0. :21 12-0858 ACN: 101 DATEe 06-04-2013
TAX RETURN WAS: C Xl ACCEP7ED AS FFLED C ) CNANGED
APPRAISED VALUE OF' RETURN BASED ON: dRIGINAL RETURN
1. Real Estate (Schedule A) C1) •00 NOTE: To ensure proper
2, Stocks and Bonds tSchedule B3 t�� .0 0 ��'edit to your account,
.00 submit the upper portion
3. Closely Held Stack/Partnership Interest (Schedule C) C3) of this form with your
4. MortgagestNotes Raceivable CSchedule D3 t43 •d Q tax payment.
5. Cash/Bank Deposits/Misc. Personal Property CSchedule E) C5) 1,58 5.9 9
6. Jaint2y Owned Praperty {Schedule F3 t�� 1�:915.41
7. Transfers CSchedule G) ��� 91,729.97
a. Tatal Assets {g} 1Q7,231 .87
APPRQVED DEDUCTIONS AND EXEMPTIONS:
9. Funeral Expenses/Adm. Costs/Misc, Expe�ses CSchedule H} �9} 9.5 76.7 0
10. DebtslMortgage liabilities/Liens CSchedule T3 L10) 31 ,391.23
1�. Tota3 neductions �11� 40,967.93
12. Net Vaiue af Tax Return {12� 6b,2b3.94
13. Charftable/Governmental Bequests; Non-elected 9113 Trusts CSchedule J) C13� .0 0
14. Nat Ya2ue af Estate Subject ta Tax {14) ��x��3•g4
NOTE: If an assessment was issued previously, Lines 14, 15, 16, 17, 18 and/or 19 will
reflect figures that include the total of all retu�rns assessed ta date.
ASSESSMENT OF TAX:
15. Amount af line 14 a£ sRausal rate (15) .00 � 0 0 = .0 0
16. Amount of Lina 14 taxable at lineal rate Cifi) �X•���'°g�' X a45 = 2,9$1.88
17. Amount of Line 14 at sibling rate C17) - �� X 1 2 = .00
18. Amount of �ine 14 taxable at callaterel rate {;8) ,0 0 X I 5 = .0 0
14. Principal Tax Due �1��- 2,981.88
TAX CREDITS:
PAYMENT RECEIPT DISCOUNT t+)
AMQUNT PAID
DATE NUMBER INTEREST/PEN PAID (-)
IO-09-2012 CDOIb621 149.09 3:500.00
TOTA� TAX PAYMENT 3,b49.09
BALANCE OF TAX DUE 667.21CR
INTEREST AND PEN. .00
rara� DUE b67.21CR
� IF PAID AFTER DATE INDICATEA, SEE REVERSE IF TqTAt DUE IS REFLECTED AS A CREDIT CCR), YOU MAY BE DUE
FOR CAICULATION OF ADDITIONAL INTEREST. A REFUND. SEE REVERSE SIDE FOR TNSTRUC7IONS.
IN RE: : IN THE COURT OF COMMON PLEAS
ESTATE OF THRESSA E. SMITHj : CUMBERLAND COUNTY, PENNSYLVANIA
Deceased : ORPHANS' COURT DIVISION
: NO. 21-12-0858
CERTIFICATE OF SERVICE
I, LINDA J. OLSEN, Esquire, hereby certify that a true and correct copy of the Response
of Respondent James W. Smith to Petition for Citation of Petitioner Eugene A. Smith, Jr. was
served upon the following parties-in-interest by first class mail on July 23, 2013.
Counsel for Eugene A. Smith, Jr.:
Frederick M. Nice, Esquire
Latisha Bernard Schuenemann, Esquire
Leisawitz Heller Abramowitch Phillips, P.C.
2755 Century Boulevard
Wyomissing, Pa 19610
James W. Smith
315 Robson Road
Dillsburg, Pa 17019
,
Date: July 23, 2013 �
Lin a J. lsen, Esq ' e
Attorney I.D. No. 92858
HAZEN ELDER LAW
2000 Linglestown Road
Suite 202
Harrisburg, PA 17ll0
(717) 540-5443
lolsen(cr�,hazenelderl aw.com
Attorneys for Respondent, James W. Smith